Maine companies are increasingly relying on investors and partners outside the state to reach larger markets and gain financial resources to grow their businesses.
A critical mass of investors “from away” is swelling. Maine’s largest venture capital deal in the past two decades was made this quarter in Portland, with money from as far away as China.
Portland-based Vets First Choice, an online store for veterinarians, raised $223 million in the third quarter, led by private equity firm Clayton, Dubilier & Rice of New York and investment firm Hillhouse Capital Group of Beijing. Vets First Choice CEO Ben Shaw said at the time of the investment that he needed to get from from outside Maine in order to grow in Europe, Asia and the United States.
The transaction ranked 10th among total U.S. venture capital deals in the third quarter in the quarterly PricewaterhouseCoopers and CB Insights report released Wednesday.
Over the past three years, five companies in Portland alone were acquired by or merged with out-of-staters in an effort to boost revenue and expand lines of business.
Most recently, PDT Architects was acquired on Oct. 1 by CHA Consulting, an Albany, New York, construction and engineering company, for an undisclosed amount.
“We’re an average-sized architecture firm that wanted a bigger platform. CHA has 30 branch offices in the midwest and elsewhere, so we could get more income from their out-of-state projects and have a much deeper bench of resources for our clients in Maine,” PDT co-founder Lyndon Keck said.
The deal will let PDT expand into sports, environmental engineering and other venues as well as add five to seven employees to its current 25 in the next year, Keck said.
He expects Maine businesses to continue looking outside the state for partners.
“Maine businesses are getting known nationally, and they have a reputation for a quality workforce,” he said.
Nat Henshaw, president of CEI Ventures in Brunswick, said he’s hearing the same thing from other venture capitalists and angel investors, who are wealthy private investors.
“It’s a wonderful thing for Portland, because we are getting on the map for big acquisitions,” he said. “We are finally in a place where people come to buy companies at a good price. And more venture capital money is flowing here because investors know they can get a big exit [return on investment].”
Other Portland companies involved in merger and acquisition deals in recent years include generic animal medicine company Putney, bought for $200 million by UK company Dechra; software company Certify, part of four merged companies bought for $125 million by K1 Investment Management of California; software developer Kepware, bought for $100 million by Massachusetts tech company PTC; and gift card company CashStar, bought for $175 million by California’s Blackhawk Network.
Certify, which in June became the parent to the other three merged companies from Toronto, Pennsylvania and San Francisco, said the combined companies would double its revenue and triple its customers.